The eleven month accounts published today by the Treasury show that its financial situation improved somewhat in May. The total Crown operating balance improved from a deficit of almost $7.7 billion in April to under $7.2 billion in May, an improvement of more than $0.5 billion for the year. OBEGAL, the operating balance excluding portfolio gains and losses, improved even more - from a deficit of $1.8 billion to $1.2 billion at the end of May. The main reasons for these improvements are that benefit claim levels have not been as high as projected - not yet anyway - and that The NZS Fund and ACC have reported higher"than"forecast investment gains. Tax revenues from individuals is close to expectations, but tax revenues from companies is down noticeably as profitability vanishes from many firms. Similarly, tax revenues from interest payments is not growing as it once did. It is now level pegging with the same period last year, as the impact of lower interest rates, and tax-advantaged PIE accounts both limit withholding tax revenue growth.
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